On the Continuing MacHeist Controversy

Wednesday, 2009-03-25; 12:58:45

[UPDATE 2009-03-26: For everyone who doesn’t seem to get this: I know that the developers were not forced to participate in this bundle. That is irrelevant. And yes, developers will get a huge sum of cash up front. That is also irrelevant. I think in the long run it’s a bad deal for developers, and consumers should think about where their money goes. Why pay $39, a portion of which goes to MacHeist — middlemen who add no value to the actual apps themselves — when you can pay a little bit more and have all of your money go to the actual developers?

Put it this way: would you rather pay $10 to Universal Music Group for a music album, or $15 directly to the band in question?

Also, please see my three previous posts on MacHeist before commenting. Thanks.]

Gruber over at Daring Fireball writes:

I’m unsure why there seems to be lingering controversy regarding the new MacHeist bundle. My issue with the first MacHeist bundle two years ago was that developers were offered flat fees, rather than percentage cuts. Clearly this is no longer the case. Gus Mueller, critic of the terms of the original bundle, is participating in this year’s, and he puts it plainly:

So why is Flying Meat participating in MacHeist time around, when I blasted it a couple of years ago? Well, it’s pretty simple. The folks at MacHeist fixed the payment terms after MacHeist 1, and developers are getting a much better deal now. Tada.

Gruber is a smart guy. Sure, developers are getting percentage cuts now, but it’s hard to not come to the conclusion that developers are still getting screwed over, despite Mueller’s protestations to the contrary. I’m surprised that Gruber doesn’t see this.

Really, I don’t care about what Phill Ryu or John Casasanta said or didn’t say. Let’s do the math.

First off, let’s assume that the three “unlockable” apps will be unlocked this time around. (I mean, really, do they ever not get unlocked? It’s a stupid gimmick.) That means that the value of the bundle is $950.75, and $975.70 for the first 25,000 buyers. The bundle itself is selling for the “insanely low price” of $39. Let’s put into perspective really how “insane” this actually is.

Assume the percentage cut for each developer depends upon the value that app adds to the bundle. So we’ll use price as a proxy for the percentage cut that each developer makes. iSale is worth $39.95, so the iSale developers might be getting 39.95/950.75 or 4.2% of the profits. Pictureseque is worth $34.95, so its developers might be getting 34.95/950.75 or a 3.7% cut of the final profits. And so on.

Now, remember, 25% of the profits go to charity. So for every purchase of the bundle, $9.75 gets lopped off the top. Of the leftover 75%, iSale gets 4.2% of the cut, or $1.23.

Let that sink in. The developer of iSale is getting $1.23 for a single license of iSale, rather than the full $39.95. The iSale developers are devaluing their own product, supposedly [EDIT: striking out the weasel word, thanks Flooey] of their own free will, by 97%. In fact, all developers are devaluing their product by 97%.

Profit per
Bundle Sale
iSale 4.2% $1.23
Picturesque 3.7% $1.08
SousChef 3.2% $0.92
World of Goo 2.1% $0.62
PhoneView 2.1% $0.61
LittleSnapper 4.1% $1.20
Acorn 5.3% $1.54
Kinemac 31.4% $9.20
WireTap Studio 7.3% $2.12
BoinxTV 20.9% $6.12
The Hit List 7.4% $2.15
Espresso 8.4% $2.46

*percentage cut based on a $950.75 bundle value; also based on Phill Ryu and John Casasanta taking a 0% cut and organizing MacHeist out of the goodness of their hearts

Kinemac, which regularly retails for $300, is not even getting $10 for each sale of the bundle. Who in their right mind would do such a thing? I mean, really? Talk about insane.

This is all assuming that Phill Ryu and John Casasanta get no cut whatsoever. This also assumes that the developer of Big Bang Board Games also gets no cut. Who knows what percentage Ryu and Casasanta are taking this time around? The iSale developers are probably getting $1, not $1.23, for each bundle sold.

Fundamentally, what it comes down to is that those consumers who are participating in the MacHeist bundle are tightwads. Even if you’re only interested in one of the apps in the bundle, it’s likely that only a little more than one of your dollars is going to the actual developer of that app. And you’re doing it all because you can get that app for a really cheap price, especially if you’re looking to get BoinxTV or Kinemac, which normally cost $200 or $300, respectively.

And people are complaining at the bargain basement prices of iPhone apps.

Marco Arment is being nice when he says:

My point is whether it’s a good idea, as conscientious consumers, to accept such steep discounts on the products that we use and love.

My argument is that it’s not.

Let’s just say it like it is, Marco. If you’re buying MacHeist, you’re a cheap fucking bastard, and it makes me queasy that so many in the Mac community would buy into such a thing.

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